The partners of A,B and C distributed the profit s for the year ended 31st March 2017,Rs.80,000
in the ratio of 3:3:2 without providing for the following adjustments.
a) A and C were entitled to a salary of Rs.1,500 each p.m.
b) B was entitled for a salary of Rs.4,000 p.a.
Pass the necessary Journal entry for the above adjustments in the books of the firm, Show your
workings clearly.
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Explanation:
The fundamental advantage of principles-based accounting is that its broad guidelines can be practical for a variety of circumstances. Precise requirements can sometimes compel managers to manipulate the statements to fit what is compulsory.
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